With petrol prices in the US topping $5 a gallon for the first time, the one vehicle that can alleviate pain at the pump — an electric car — is experiencing its own bout of runaway inflation.
Car makers pressed by consumer demand and rising material costs are charging more for electric vehicles across the board.
Market leader Tesla is boosting sticker prices by as much as $6,000 a car, its third increase this year, Electrek reported. Ford Motor has raised the price of its Mustang Mach-E, following a similar move by electric vehicle start-up Rivian Automotive.
And yet the buyers still keep coming.
“We’ve seen an actual acceleration in demand” at Rivian since the boost on March 1, Claire McDonough, its chief financial officer, said at a Deutsche Bank conference on Thursday.
“We had 10,000 new pre-orders with a $93,000” average selling price, she said.
The average price of an EV reached $60,984 last month, well above the $46,634 mark for the overall market, automotive researcher Edmunds reported.
That average excludes Tesla, which doesn’t share pricing data with research firms, but Electrek reported that the popular Model Y long-range model now starts at $65,990, up from $62,990.
“There is growing interest in EVs because of the gas shock, which has been going on for months and shows no signs of abating,” Jessica Caldwell, Edmund’s executive director of insights, said in an interview.
“Along with growing demand, there is very limited supply. And if anyone is going to absorb these costs, it’s probably someone looking at an EV, who generally has a higher income.”
Ms McDonough isn’t the only car executive saying that EV buyers continue to accept higher prices, even as the broader market is starting to push back on inflationary sticker prices.
“If there’s one area where I do think we have some capability to price left, it’s on our electric vehicles,” John Lawler, Ford’s chief financial officer, said on Wednesday at the Deutsche Bank Global Automotive Conference.
“So far, the pricing is sticking.”
Beyond demand, car makers are boosting EV prices because of runaway raw-material costs, which Ford sees as a $4 billion headwind for the company this year. Chief executive Jim Farley recently said it now costs $25,000 more to build a battery-powered Mustang Mach-E than a petrol-fuelled Edge SUV.
Mr Lawler said higher costs have wiped out EV profits at Ford.
“It’s not just gratuitous, take-advantage-of-the-market type of price increases,” Ms Caldwell said.
“We are seeing commodity costs going up, including the mining costs for everything that goes into an EV.”
Boosting prices is one approach car makers are taking to get EVs back in the black as demand surges. Ford also is re-engineering the Mach-E on the fly to reduce cost and improve margins.
EV price inflation also is being stimulated by the continuing semiconductor shortage, which has crimped the supply of battery-powered models because they require more chips than traditional cars.
That led Tesla chief executive Elon Musk to declare in an internal memo this week that the car maker had endured a “very tough quarter” due to supply constraints, despite delivering a record 310,048 vehicles in the year’s first three months.
“We need to rally hard to recover,” he wrote.
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
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Hurricanes 31-31 Lions
Wellington Hurricanes:
Tries: Gibbins, Laumape, Goosen, Fifita tries, Barrett
Conversions: Barrett (4)
Penalties: Barrett
British & Irish Lions:
Tries: Seymour (2), North
Conversions: Biggar (2)
Penalties: Biggar (4)
Zayed Sustainability Prize
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
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Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
The five pillars of Islam
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Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Zakat definitions
Zakat: an Arabic word meaning ‘to cleanse’ or ‘purification’.
Nisab: the minimum amount that a Muslim must have before being obliged to pay zakat. Traditionally, the nisab threshold was 87.48 grams of gold, or 612.36 grams of silver. The monetary value of the nisab therefore varies by current prices and currencies.
Zakat Al Mal: the ‘cleansing’ of wealth, as one of the five pillars of Islam; a spiritual duty for all Muslims meeting the ‘nisab’ wealth criteria in a lunar year, to pay 2.5 per cent of their wealth in alms to the deserving and needy.
Zakat Al Fitr: a donation to charity given during Ramadan, before Eid Al Fitr, in the form of food. Every adult Muslim who possesses food in excess of the needs of themselves and their family must pay two qadahs (an old measure just over 2 kilograms) of flour, wheat, barley or rice from each person in a household, as a minimum.
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Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
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How to vote
Canadians living in the UAE can register to vote online and be added to the International Register of Electors.
They'll then be sent a special ballot voting kit by mail either to their address, the Consulate General of Canada to the UAE in Dubai or The Embassy of Canada in Abu Dhabi
Registered voters mark the ballot with their choice and must send it back by 6pm Eastern time on October 21 (2am next Friday)
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
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Read part one: how cars came to the UAE
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
